Item 1.02 | Termination of a Material Definitive Agreement. |
Concurrently with the entry into the Merger Agreement, the Company, REIT I Operating Partnership and REIT I Advisor entered into a termination letter agreement (the “Termination Agreement”), effective as of April 11, 2019. Pursuant to the Termination Agreement, the Amended and Restated Advisory Agreement, as amended, dated as of November 26, 2010, by and among the Company, REIT I Advisor and REIT I Operating Partnership (the “Advisory Agreement”) will be terminated at the effective time of the REIT Merger. Also pursuant to the Termination Agreement, REIT I Advisor waived any disposition fee it otherwise would be entitled to pursuant to the Advisory Agreement related to the Merger and confirms the disposition fee payable to REIT I Advisor in the event the Merger Agreement is terminated and the Company consummates a different transaction that would entitle REIT I Advisor to the disposition fee.
The foregoing description of the Termination Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Termination Agreement, which is filed as Exhibit 10.3 and is incorporated herein by reference.
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant. |
On April 11, 2019, REIT I Operating Partnership, the Company, and certain of REIT I Operating Partnership’s subsidiaries entered into the Consent and Second Amendment to the Third Amended and Restated Credit Agreement (the “KeyBank Credit Facility”), with KeyBank National Association, a national banking association (“KeyBank”), certain other lenders, and KeyBank, as Administrative Agent, which provides for KeyBank’s consent, as Administrative Agent, to REIT I Operating Partnership’s and the Company’s execution and delivery, but not the consummation of, the Merger Agreement. In addition, the Consent and Second Amendment to the KeyBank Credit Facility modifies limitations on the distributions for each calendar quarter in 2019 and the first calendar quarter of 2020 to be limited to a daily distribution rate of $0.000876713 per share of the Company.
In addition, on April 9, 2019, REIT I Operating Partnership exercised its right to a12-month extension of the KeyBank Credit Facility’s May 28, 2019 maturity date. Therefore, the maturity date of the KeyBank Credit Facility is now May 28, 2020.
As of April 11, 2019, the Company is in compliance with the covenants of the KeyBank Credit Facility.
The actual amount of credit available under the KeyBank Credit Facility is a function of certainloan-to-cost,loan-to-value and debt service coverage ratios contained in the KeyBank Credit Facility agreement. Except as set forth in this Current Report on Form8-K, the material terms of the KeyBank Credit Facility remain unchanged from those reported in the Company’s Current Reports on Form8-K filed with the SEC on August 17, 2018 and February 5, 2018, which are incorporated herein by reference.
As of April 11, 2019, the Company had a total unencumbered pool availability under the KeyBank Credit Facility of $311,879,000 and an aggregate outstanding principal balance of $228,000,000. As of April 11, 2019, $83,879,000 remained to be drawn on the KeyBank Credit Facility.
The material terms of the agreement discussed above are not complete and are qualified in their entirety by the Consent and Second Amendment to the KeyBank Credit Facility attached hereto as Exhibit 10.4 to this Current Report on Form8-K, and is incorporated herein by reference.
Item 7.01 | Regulation FD Disclosure. |
On April 11, 2019, the Company and REIT II issued a joint press release announcing the execution of the Merger Agreement as described in detail in Item 1.01 above. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 7.01 disclosure.
In addition, on April 11, 2019, the Company posted to its website (http://www.cvmissioncriticalreit.com) a presentation prepared by the Company and REIT II containing certain information related to the proposed REIT Merger. A copy of the presentation is filed as Exhibit 99.2 to this Current Report on Form8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure.
Further, on April 11, 2019, each of the Company and REIT II has made available on its respective website a jointpre-recorded webcast to discuss the proposed REIT Merger. The webcast script is hereby furnished as Exhibit 99.3 to this Current Report on Form8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure. The related presentation is the presentation furnished as Exhibit 99.2 to this Current Report.